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Sale



 


1. Valid Sale (Bai Sahih):

Sale (Bai) is commonly defined in shari'ah as "the exchange of a thing of value by another thing of value with mutual consent". More specifically it means "the sale of a commodity in exchange of cash"

A sale becomes valid if the following elements are present as well as the conditions in the attached chart # 2 are complied with:

· Contract (Aqd)
· Subject Matter (Mabe'e)
· Price (Thaman)
· Possession or delivery (Qabza)

2. Void/Non Existing Sale (Bai Baatil):

Sale will be void if any one of the conditions of offer and acceptance (1.1), conditions of Buyer & Seller (1.2) and sold good conditions (2.1 - 2.5) are not complied with. In a void sale, the buyer does not have title to subject matter and seller does not have title to price. Both subject matter and price cannot be used lawfully. The produce of both shall be unlawful.

3. Existing sale but void due to defect (Bai Fasid):

Sale will exist but will be void due to defect if the conditions of contract (1.3), sold good conditions (2.6 & 2.7) and conditions of price (3.1 & 3.2) are not complied with. However, if the defect is rectified the sale becomes valid. In a fasid sale, the buyer should not possess the subject matter. If possessed with the consent of the seller, title or ownership will pass to the buyer but usage of subject matter will be impermissible. He must return it to the seller.

4. Valid but disliked sale (Bai Makrooh):

A sale will be Makrooh when the transaction is complete and one gets possession of the goods but is disliked eg. sale after Juma Azaan, sale after hoarding or where a third party intervenes to buy something which was under negotiation of sale between other parties.

Types of Sales

Following are the common types of sales
1. Bai Musawamah: It refers to normal sale in which cost price is not known.
2. Bai Murabaha: It refers to a sale in which cost and sale price is known to the buyer.
3. Bai Muqayada: It refers to barter sale excluding currency sale.
4. Bai Surf: It refers to the sale of gold, silver and currency.
5. Bai Salam: It is a kind of sale in which payment is spot while the delivery of the good is deferred.
6. Bai Istisna: It refers to such sale in which commodity is transacted before it comes into existence. It is basically an order to manufacture.
7. Bai Muajjal: It refers to such sale in which payment is delivery is spot while payment is deferred but cost is not known.


Five khiyars
The term khiyar refers to the option or right of the buyer & seller to rescind a contract of sale.

There are five khiyars in a sale contract which are as follows:

Khiyar-e-Shart (Optional condition): At the time of sale Buyer or Seller can put a condition that he has an option to rescind the sale within the specific 4 days. This option is called Khiyar-e-Shart.
Specification of the days is necessary for this Khiyar. Within this period, he has the right to rescind/dissolve the sale without any reason. If the buyer puts the condition, it is called Khiyar-e-Mushtari (option of buyer) and when put by the seller, it is called Khiyar-e-Bai (option of seller). This Khiyar is not transferred to heirs.

Khiyar-e-Roiyyat (Option of inspecting goods): Where the goods can be returned after inspection. This applies automatically to all contracts. Eg. 'A' buys machinery from 'B' without seeing. However, 'A' has the option to return the machinery after inspection.

Khiyar-e-Aib (Option of defect): Where the goods can be returned if found defective. It is the responsibility of the seller to supply goods free of error/defect or point out the defect to the buyer. No way is he allowed to cover the defect of the goods which constitutes as fraud. In one of the hadiths, Prophet has stated "He is not amongst us who indulges in fraud." Therefore the buyer has the right to return the good in case of a defect which is considered a defect in the market and which depreciates the value of the goods. Eg. 'A' buys batteries from 'B'. However, 'A' has the option to return them to 'B' if the batteries are found to be defective or not in working condition.

Khiyar-e-Wasf (Option of quality): Where the goods are sold by specifying a certain quality by the Seller but which is absent in the goods. Eg. 'A' buys a car from 'B' who has specified automatic transmission of the car. However when 'A' uses the car, he finds the transmission to be manual. Therefore he can return the car to 'B' in the absence of a specific quality.

Khiyar-e-Ghaban (Option of price): Where the seller sells the goods at a price which is far expensive than the market price, a Buyer has the right to return it to the seller. Eg. a Parker pen is sold to 'A' by 'B' at a price of Rs.500/-. However after the sale, 'A' discovers its market price to be Rs.250/-, he has the option to return the pen to 'B'.

Iqala (Recession of Contract): Where parties freely consent to rescind the contract i.e. each party will give back the consideration received by it.
Neither the buyer nor the seller has the sole right to rescind the contract after execution of a contract. Often the buyer wants to rescind the contract after buying goods. In this case, it is necessary that he gets the seller's consent. Therefore this mutual agreement between buyer and seller to rescind the contract is called Iqala.

In one of the hadiths, Prophet has stated "He who does the Iqala (rescinding of the contract) with a Muslim who is not happy with his transaction, Allah will forgive his sins on the Day of Judgment."

However, it may be noted that the price of the goods being returned under Iqala will remain unchanged.
Effect on third Parties: Iqala is treated as a new sale as if a new contract is entered into between the parties rescinding the original contract.